Providing vehicles for staff to use as part of their employment package is a hugely expensive exercise.

It is one of the reasons why many organisations might prefer to pay employees a cash allowance and a business mileage rate than invest in providing cars.

If fleet policies are particularly restrictive, with tight CO2 emissions limits or strict vehicle types, staff might decide taking a cash alternative would give them more freedom to choose a car they would feel more comfortable in, or is more suitable for the type of journeys and use outside of work.

However, this does not mean someone taking cash instead would be entitled to spend the money on any vehicle they want.

Organisation will probably set an annual mileage threshold where they believe provision of a company car is justified and necessary, but for staff who might receive a car more as a perk or part of their remuneration package, cash could be offered as an alternative.

Employers still have a duty of care when staff are driving on business and there is likely to be an agreement to sign with conditions set regarding the type of car used for work.

The vehicle is likely to have a maximum age and mileage, have reached a certain crash safety score in Euro NCAP.

As an employee, you are likely to have to sign up to a commitment to ensure the car is serviced and maintained according to the recommended schedule as well as have your driving licence checked regularly so the employer knows you are qualified and permitted to drive, and carry additional insurance cover for driving on business.

Organisations can choose to pay a business mileage rate for employees own car use at their own discretion.

The government suggests an AMAP (authorized mileage allowance payment) rate of 45 pence per mile for the first 12,000 business miles and 25 pence per mile thereafter.

Although this payment might seem generous compared with how much fuel the car uses, the payment is intended to cover all costs associated with running the vehicle, including road tax, insurance (including any higher premium to ensure the car is covered for business mileage) servicing, maintenance, repair and, where applicable, MOT test.

Some organisations pay higher than the AMAP rate, which can also result in a small profit for the driver if they choose a frugal car, but for any employer that pays less, or nothing at all, the employee can reclaim the balance up to 45p per mile from HMRC.